In this episode of Business Casual, John Byrne, alongside Maria Wich-Vila and Caroline Diarte Edwards, delves into the shifting dynamics of international enrollments at top U.S. MBA programs. They explore the intricate balance between domestic and international student ratios, influenced by factors like domestic applicant trends and political climates, notably the Trump administration’s impact. Georgetown, Washington Foster, and Columbia Business School are highlighted for their significant, albeit declining, international cohorts.

The analysis reflects broader trends in global business education, emphasizing the need for diversity in academic environments to enrich learning and mirror the global business landscape. Schools are adapting to fluctuating international interest, which is reshaping their recruitment strategies and potentially the future landscape of MBA education in the U.S.

Episode Transcript

[00:00:06.960] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co-host, Caroline Diarte Edwards and Maria Wich-Vila. We, every year, take a look at those class profiles that come out from all the top schools in the world, and we do our little analysis on them. And this past week, we’ve taken a look at international enrollments at the top US schools. And there’s some really interesting data here. We identify the US MBA programs with the largest number of international students, and those that have gone up, and those who have gone down. Traditionally, in the US, many of the top schools aim to have about a third of their student body from outside the US for the purposes of diversity and to give different perspectives in the classroom. But those old rules have been thrown out a lot because there have been consecutive years of domestic applicant decline. And So many schools have become more reliant on international MBA students. And then you have, of course, the Trump factor, which did impact, we believe, the 2024 incoming classes because it was clear that he was running and there was some concern over whether or not he would be reelected, and of course, he has been.

[00:01:33.870] – John

We expect to see a more significant decline in this coming year. But I want to just give you a sense of what we found. The schools with the largest international cohorts are Georgetown. This last fall, fall of 2024, 49% of the students at Georgetown in the MBA program came from outside the United States. That is down 10 points, incidentally. At Washington Foster, it’s 46%, also down 10 points. At Columbia Business School in New York, it’s 46% as well, down only one point. At Indiana Kelly, it’s 46 as well, down from 58%, so that’s a 12-point decline in one year. I think you’re getting the trend line here, which is essentially fewer international applicants and students, because I think that in many cases, these enrolled numbers are indicative of the applicant pool. There are a few schools that went up. Unc Kenan–Flagler went from 34% in ’23 to 43%, Washington Olin went down 51 to 44. Michigan Ross, pretty much steady, 43 and 23, 44 and 24. Caroline, you’re our international expert. What do you make of these numbers? And what did they tell you about the state of business education education in America?

[00:03:01.360] – Caroline

Well, there’s always going to be some fluctuation in these numbers. As you said, it’s a function of the application pool, and there’s always going to be a cycle of different factors, international applications, domestic applications, how the economies are doing in different countries, and what that means for the number of people applying to business school and who feel confident about coming to the US and confident about leaving their jobs and going abroad, potentially. I think it also reflects the domestic rebound, so an increase in applications from domestic applicants, and so schools not being as reliant as they may have been in some past years on the international application pool. So I think that schools won’t be too concerned about these numbers because I think it’s probably as much a factor of an increase domestically in candidates coming through rather than a decline internationally. But there probably is some fall off internationally. And I think that with Trump running as President, there was concern about the implications for candidates coming to the US who might feel that they may be coming to a less welcoming environment. We certainly saw that having an impact last time around under the Trump presidency.

[00:04:25.050] – Caroline

And then, of course, concerns about visas. And if candidates are coming from overseas study in the US. For many of them, it’s a tremendous investment. It’s very costly to do an MBA in the US, even if you’re a domestic student and earning a salary in the US. Most of these programs were looking at a full-time two-year programs. It’s a huge investment. If you’re coming from India or Latin America or Africa, many other countries, your earning capacity is not the same as someone coming from US or perhaps someone coming from Western Europe. And so it can be quite an intimidating prospect, and you got to have a lot of confidence in your ability to get a return on investment as well as access to financing, of course. And perhaps fewer candidates have confidence that they will get that return or they will have a guaranteed return if they’re not sure that their ability to stay in the US post MBA is guaranteed. Because although I don’t know. I think an increasing number of students do have great opportunities in their home countries, right? And we’ve seen more MBA graduates going back to India, for example, rather than staying in the US or staying in Europe post-MBA because of the increase in great opportunities there, still many of these students are looking to make a career move internationally post-MBA.

[00:05:55.920] – Caroline

And so if they feel that they don’t have complete confidence in their to do that, then they may be less inclined to apply in the first place.

[00:06:04.100] – John

Yeah, exactly. In our sample, across 29 top schools, 21 saw declines between 23 and 24, five of them by double digits. The rest, I guess, eight had increases, generally fairly slight. Maria, can you really get a true global education in America?

[00:06:25.590] – Maria

I don’t know that any American school would provide as global of an education as as the INSEADs of the world or the other programs, mostly in Europe, where, say, 90% of the student body is from another country that is not the home country. But that having been said, American business schools seek out and enroll international students for a reason. There’s definitely a big benefit to having various perspectives from various markets across the world in your classroom. While I will acknowledge that I think that the INSEADs of the world probably do a better job of being purely international, I think the US schools have a nice balance of bringing in those international voices from some of the world’s largest economy, some of the world’s perhaps smaller but faster-growing economies, some of the world’s struggling economies. I think they do get a really good mix of voices into the classroom. I do think that you can learn quite a bit about international markets by attending a US business school. I also think that many of the students who come from overseas, I believe that they may be coming to the US to learn about the American capitalist business system.

[00:07:43.920] – Maria

If part of the goal for them is to learn more about American culture and American management practice and all the different ways that America does things, it may have flaws, but it still is a very strong system, there there is a benefit to the international students to coming not only to be immersed in the US in terms of living here, but also in being in a classroom where there are at least as many American students, if not sometimes a two-third to one-third approximate ratio.

[00:08:14.670] – John

True. Caroline, do you think there’s a tipping point? In other words, an ideal percentage of international students to have in a US classroom, what do you think it would be?

[00:08:23.190] – Caroline

Well, I think that’s hard to judge, but if you look at the numbers, it does seem that schools have a target of roughly somewhere between 30 and 40 %. That seems to be the number that they return to after some blips here and there. But that seems to be where they are the most common average of international students. And so that suggests that they find that they want to keep internationals as a minority in the classroom for the reasons, no doubt, that Maria said that they want it to be It’s primarily a US-focused experience because the domestic applicants are most likely staying in the US post-MBA. And so whilst it’s useful for them to get some international perspective, that doesn’t need to be the core of what they’re learning. And the international candidates are likely planning to stay in the US post-MBA as well. And therefore, they are looking for more of an immersive experience rather than a purely international experience. So I suspect that that’s what they’re aiming for. What I’ve also heard is that schools can sometimes get pushback from alumni if they have too large a percentage of international students. And alumni start to get concerned that it will impact the alumni community in the US if there’s 50 % international students, and therefore people might be eventually leaving the US, that could dilute the impact of the alumni network in the US.

[00:09:59.480] – Caroline

So I’ve heard that there has been pushback in the past about that. It does look for the numbers. They’re targeting roughly a third of the class as that magic number.

[00:10:12.050] – John

Yeah. In the big three, Wharton is at 31 Harvard at 35, and Stanford at the high end of the big three at 39. Then of the M7 schools, I think the schools that have the greatest international representation would be Columbia. That makes sense because New York is a magnet. It’s 46% at Columbia. At MIT, it’s 40%. Those are the numbers at the really elitist schools, put it that way. Then actually, at some of the secondary schools, you have higher numbers of percentages of international students, I think in part because they probably can draw higher quality international students than maybe even domestics if if you’re not in the top 20, let’s say, which is an interesting part of the composition of these different classes. Now, we said that in Europe, you can get a truly global education because 90%, if not more, of the students in most European business MBA programs are going to be from outside the given country. That makes for a very different learning experience. It’s not only very multicultural, but because there’s no center, meaning you go to an INSEAD and really, even though the main campus is in France with another campus in Singapore for MBAs, the location means, in my mind, much less than it would in the school where the cohort is dominated by domestic students.

[00:11:57.550] – John

Would you say that’s true, Caroline?

[00:11:59.460] – Caroline

Yeah, it’s It’s a very different experience. It’s a very different learning experience. So as you said, at schools like in Seattle, on a business school, the other top international programs in Europe, they’ve always sought to craft a class of people from very different countries, backgrounds, so that diversity has always been a core part of these MBA programs. And over time, 20, 30 years ago, that diversity was more European dominated, and And now it is much more global than it used to be. And it does create a magic in the classroom when you have people from such very different cultures and such incredibly different life experiences and professional experiences. And so that’s a huge part of what draws people to those schools and what you will learn in that classroom. You will learn so much about the challenges of working across borders, different cultural practices, the challenges of working in international teams. I mean, you will experience that because you will be working in teams with people from very different backgrounds. And you might think that because someone has gone to INSEAD and people have something in common, if they’re heading off to business school. They are bright young professionals, very motivated, very ambitious, etc.

[00:13:22.050] – Caroline

Yet you get some terrible culture clashes in those teams. And every year there are people knocking at the door of the program management team saying, I just, you have to change my team. I cannot work with these people anymore. I’m sorry. I just can’t do it. I can’t do it. Happens every single class, and they always say, no, sorry, you’ve just got to make it work. That’s part of the learning experience, and they have to get through it however painful it is. And it often is painful, right? It is extraordinary how people from such different backgrounds, even though they have come to the same in place and therefore have different things, have some things in common, how differently they can see things and how differently they might tackle a problem or even how their expectations about it, how a team will work together can be very different. So that’s definitely a key part of what MBA students will take away from an experience at a school like that. And that is very relevant if you are internationally mobile, if you are targeting a career where you will likely work outside of your home country or work in a very global organization where you be working with international teams, that’s incredibly valuable.

[00:14:38.100] – Caroline

And recruiters recognize that. Recruiters come to schools like that to recruit for multiple offices around the world. They’re not just recruiting for Europe or for London or for a short list of offices. They’re typically recruiting for many offices around the world because they know that they can parachute in a graduate from one of these top international programs pretty much into any country, and they can be successful. Of course, there can be language challenges. If you don’t speak the local language in many countries, it It’s going to be difficult to get a job. But there are many countries where you can go and work with where the primary language will be English. Of course, many of these schools as well, people do have language skills beyond English, because if they are not native English speakers by definition, they are bilingual, and then many people have a third language as well. So many people are able to function effectively in business in a language that is not their first language.

[00:15:45.070] – John

Now, Maria, I’m thinking, okay, I’m a fire breathing capitalist, and if I go to a US school, I’m going to find more fire breathing capitalists who want to make real money and have a real impact. There are a lot of international students who may disagree that purpose of business is to make a lot of money and may actually be more inclined to think that business has responsibilities to society, to its customers, to its suppliers, to its employees, which, let’s face it, isn’t Business schools in the US primarily taught the shareholder model of governance for many years. They have broadened that to the so-called stakeholder model. But nonetheless, I’m going to just bet that the more US students in the classroom, you’ll have more fire breathing capitalists. It may be a little uncomfortable to hear people say, Oh, well, business doesn’t have to make a profit. It just has to make enough money to pay its employees because the responsibilities that business have go far beyond the responsibilities to the owner to return money on their investment. What do you think, Maria? Am I going to have big fights in Europe that I won’t have in the US?

[00:16:55.910] – Maria

I mean, I didn’t go to business school in Europe. I don’t That’s an interesting theory because I think one could also argue that the people who believe that their country’s less capitalistic, for lack of a better term, if they believe that the less capitalistic model is the right way to go, then they probably aren’t seeking an MBA in the US. Many of my international classmates… I mean, one of my classmates from HBS was named to Forbes list of top venture capitalists, private equity investors in China a few months ago. Presumably, I don’t want to speak for her, but presumably she came to the US to learn how to become a very good investor, and she has succeeded massively. I do think that some of the cultural differences may revolve around what is the role of capitalism? Should shareholder value reign supreme or should there be more of a triple bottom line? I also think, though, that the international students are often coming from markets in which government intervention looks a lot different than in the US. I think that they be coming from markets where there are many more constraints around everything from the ingredients they use in their cosmetics and food to the import tariff situation and protectionist policies.

[00:18:12.140] – Maria

I do think that there sometimes are some cultural differences, but I also think some of those differences in mindset come from operating in a country where the government plays a much more active role in regulating business. This is a great question because right now, I’m immediately going to hang up and I’m going to call my husband and be like, What do you think about this? What did you experience at HP? Because my mind is racing right now as I try to think through the international students. I don’t know because there were many domestic applicants who were very social enterprise-oriented, who have gone on to stay in the social enterprise space. I don’t necessarily know. Oh, yeah. Then I have another Japanese classmate who went to work for a hedge fund. I don’t necessarily know that it’s cultural per se. I think that maybe someone’s professional background has more to do with it. I can’t help but wonder if the people who might come from these more altruistic countries, perhaps they intentionally seek a US MBA because they want to experience that different because in their hearts, they are a little bit more capitalistic, so to speak.

[00:19:19.840] – Maria

That’s the experience they’re looking for. That’s the education they’re looking for, and that’s why they come to the United States. Very thought-provoking question. Thanks, John.

[00:19:28.660] – John

I remember in the years I lived in London when Maggie Thatcher was Prime Minister, her critics were saying, We don’t want America’s jungle capitalism in our country, the survival of the fittest mentality where we don’t take care of our citizens in terms of health care, our social safety net has been greatly diminished over the years and will continue to be under this new administration, unlike many European countries where you have a lot of vacation time, much more balanced with your family and your friends, your health care is pretty much taken care of. The state embraces you as opposed to rejects you. It’s a very different culture and attitude. I think if I were an American going to a French school, for example, I might collide. My capitalist views may collide greatly with these more… How would I put it? The gentle capitalist views of my last mates. Caroline, you had that experience, although I see you as a fire breathing capitalist.

[00:20:35.940] – Caroline

Absolutely. You definitely get a huge diversity of perspectives at the international schools. And so I don’t think you’re going to have a dominance of perspective that American capitalism is bad and European more social capitalistic approach is letter, you’re just going to have very different perspectives. And I can remember it, it’s yet, some of the most right wing, rabid capitalists were the finance professors. And they were working at an international school. And so there is definitely a diversity of perspective amongst the students and the faculty. And I think that enriches the experience and the debate for everyone. You have some very interesting debates as a result. Themselves. But I mean, what is different at the international schools, I think, and I’ve heard the professors talk about this as well, is that professors who have taught at both US schools and a school like in Seattle, London Business School, is that in the US schools, you tend to have a more common way of thinking, and that is no doubt driven by the fact that vast majority of people are coming from US culture. And even many of the international students, we talked about they have 30, 40% international Some of those will have also been working in the US before they go to business school, so they are not necessarily coming from a completely different mindset.

[00:22:08.550] – Caroline

In an international classroom like INSEAD, it can be much more challenging for professors to manage that debate and discussion because there is less likely to be a groupthink perspective where you are just going to have a wide variety of perspectives and opinions and very opinionated people with very different takes on different situations. That is going to just come up more frequently, inevitably, in an international classroom than it is in a US business school classroom.

[00:22:45.750] – John

True. I also think with the re-election of Trump, we’ve doubled down on jungle capitalism. I mean, all you had to do is look at his inauguration and all the tech pros behind him getting better seats than the Supreme Court justices, than senators and congressmen or even former presidents. If you want to think about the big guerrilla of capitalism, it’s Elon. He is a guerrilla, and he behaves like a guerrilla, and he was there full regalia. We’re doubling down on jungle capitalism. Although I can bet you those tech pros will be looking for handouts from the government in terms of less regulation and more government funding for this or that. Sure enough, I think today the news is that Trump is putting $500 billion into AI, and all these companies are very eager to have their hand out to get a piece of it. So much for all that. Anyway, we think, obviously, international students greatly enhance the learning experience. Today, in any real corporate job, they’re going to have great exposure to different countries and different cultures and the different people in them, and you’re going to have to work with them effectively. Schools that are devoted to that and using that expertise in the classroom are going to give you a better MBA education than those that don’t.

[00:24:11.910] – John

There you have it. Take a look at our story. It’s called the Top US MBA programs with the Most International Students. Meantime, we’ll see you next week. This is John Byrne with Poets and Quants.